Manorial Rights Indemnity Insurance Mortgage Company conveyancing requirements
Yorkshire Building Society and Lloyds TSB, as with many mortgage companies, have their own requirements when it comes to manorial rights indemnity insurance. This page is designed to help domestic conveyancing firms on the various lender conveyancing panel where the title to be charged includes manorial rights. Lawyers are advised to familiarise themselves with the CML handbook requirements for each lender, for example Barnsley BS, Halifax or Chelsea BS. The information on this page is not focused on manorial rights indemnity insurance requirements.
Need help with manorial rights indemnity insurance from your lender?
Coventry BS and Nationwide as with most lenders, obligations require that where manorial rights indemnity insurance is effected:
- you must approve the terms of the manorial rights policy on behalf of the lender
- you must send a copy of the manorial rights indemnity insurance to the mortgagor and explain to the borrower why the manorial rights indemnity insurance policy was effected and that additional insurance might be mandatory if there is additional lending against the security of the property
- the minimum level of cover for the policy must meet the requirements for the bank (see UK Finance Lenders’ Handbook Part 2 )
- your practice must explain to the borrower that the borrower must adhere to any conditions of the manorial rights indemnity insurance policy and that the mortgagor should notify the lender of any notice or potential claim in respect of the policy
- the manorial rights indemnity insurance policy must not contain terms that you are aware would void or prejudice the interests of the bank
- the manorial rights indemnity insurance policy should always be in favor of the lender and, if possible, in favour of the mortgagor and any next registered proprietor or mortgage company. Where the mortgagor will not be protected by the manorial rights indemnity insurance policy, the mortgagor needs to be informed accordingly.
- your practice is required to reveal to the insurer all relevant information which you have acquired
- the manorial rights indemnity insurance policy should be effected at no charge to the lender
| Lender | Requirement |
|---|---|
| Ahli United Bank | An amount equal to the value of the Mortgaged Property |
| April Mortgages | An amount at least equal to the mortgage advance. |
| Bank of Ireland Mortgages | The limit of indemnity must be an amount not less than the market value of the property. |
| Birmingham Midshires | An amount equal to at least 110% of the purchase price or value, whichever is higher. |
| Coutts & Co | The open market value of the property according to the valuation report. |
| Harpenden Building Society | 110% of mortgage advance |
| Hodge | An amount equal to the purchase price or value, whichever is higher. Any indemnity insurance policy must be for our benefit, that of any transferee/assignee (legal or equitable) of the mortgage, the borrower(s) and any successor in Title. |
| Hodge Equity Release | An amount equal to the purchase price or value, whichever is higher. Any indemnity insurance policy must be for our benefit, that of any transferee/assignee (legal or equitable) of the mortgage, the borrower(s) and any successor in Title. |
| JPMorgan | 110% of principal sum. |
| Kent Reliance | An amount at least equal to 110% of the mortgage valuation. |
| Market Harborough Building Society | Purchase price or valuation - higher of the two |
| National Westminster Bank | An amount equal to the value of the property. |
| Paragon Mortgages Ltd | An amount at least equal to the stated value of the Property. |
| Rooftop Mortgages | The value of the property for mortgage purposes as disclosed in the valuation. |
| Scottish Building Society | Amount of mortgage plus 25%. |
| Secure Trust Bank | An amount at least equal to the market value. Any indemnity insurance policy must be for our benefit, that of any transferee/assignee (legal or equitable) of the mortgage and also the borrower(s). |
| Swansea Building Society | Purchase price or market valuation whichever is the higher |
| Together Personal Finance | Minimum of £2,000,000.00 per claim. |
| Virgin | We require the full market value of the Property. Where this isn't available, we'll accept the loan amount as a minimum. |
| Zephyr Mortgages | Valuation or purchase price, whichever is higher. The policy must always benefit the borrower and any subsequent owner or mortgagee - the policy must be index linked. |
General Manorial Rights indemnity insurance points to consider
The extent of the terms for manorial rights indemnity insurance are explained in the policy paperwork. Conveyancing Practitioners should point the borrower to the manorial rights indemnity insurance policy document. The intention of manorial rights indemnity insurance is to provide indemnity in respect of the risks set out in the policy schedule - so you should check any draft to determine that it is in order. The lifetime of this non-investment insurance contract is in perpetuity unless the policy says something to the contrary. It is well worth checking that the time frame is correct.Significant features and benefits of manorial rights Contingency insurance :
This policy would usually provide protection from financial loss that might arise in the event of a third party making a cliam in respect of the risks identified in the policy document. Manorial Rights indemnity insurance Policies are likely to cover the following- Loss in market value resulting from the successful enforcement of the risks specified in the manorial rights insurance.
- All sums paid with the written consent of the insurance company to free the land from the risks specified in the manorial rights policy.
- All ancillary costs and expenses incurred by the Insured with consent in writing from the relevant insurance company
- The out of pocket expenses of altering or demolishing all, or part of the development and the reinstatement of the land, insofar as such alteration, demolition or re-instatement is made necessary by court order.
- Reimbursement for compensation incurred in any proceedings in respect of the risks specified in the manorial rights policy, as well as fees of a legal nature.
- Expenses for works (including professional fees) for the purpose of the development begun, or contracted for, prior to proceedings for the enforcement of the risks specified in the manorial rights policy, to the extent that such costs are rendered abortive by court decision.
Don't forget to consider what is not included in the manorial rights policy e.g. does the policy cover any property that has been altered within the 12 months prior to the commencement of the policy? Does it cover legal costs?
Manorial Rights Indemnity Insurance has limitations - Supplemental considerations
There may be consequences arising from the enforcement of the risks identified in the manorial rights insurance which are not adequately covered by financial compensation. Information contained within this webpage is for general information for conveyancers and solicitors in England and Wales on the the lender solicitor panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the mortgage company indemnity insurance. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.
An important exclusion applying to most manorial rights Policies is if you make any contact with any party who might cause a claim under the Policy, it can invalidate the cover.
The content set out above is in relation to properties in England and Wales.